The most striking proposals were for the elimination of medical debt for millions of Americans; the “first-ever” ban on price gouging for groceries and food; a cap on prescription drug costs; a $25,000 subsidy for first-time home buyers; and a child tax credit that would provide $6,000 per child to families for the first year of a baby’s life.
Maybe I’m missing somethng here. I’m not just asking this because I’m upset about the possibility of other people getting money and not me: Wouldn’t we expect the home buyers’ subsidy to only increase demand and drive up the cost of houses? Then the money would end up in the hands of those who already own one or many houses. Isn’t this just giving money to people who are already well-off? Wouldn’t it be better to create a program focused on building more houses instead?
Serious answer from a long term economic standpoint.
You want more people to participate in home ownership, it’s good for all home owners. Homes are the majority of a family’s equity/net worth. It continues to grow and appreciate and allows them to invest into themselves.
In 5-10 years, when they’re ready to upgrade, they create a lot of economic activity for everyone by selling their current house, plus additional funds, to upgrade to a new one.
If you ever want to sell your house to someone under the age of 35 who’s not a tech bro, this is how it’s done.
It’s the same logic that the economic stimulus package used to generate economic growth and activity.
The more hands money exchanges, the more valuable it is as a currency to everyone. Counter intuitively, the economy is not a zero sum game. It’s unbounded. The more people we help to achieve financial stability and the ability to participate in the housing market, the better it is for everyone currently participating in the housing market.
I’m still not understanding the part where everyone having an extra 25k for a house purchase doesn’t just increase the price of all houses by 25k. This is what happens when you increase the demand for something without increasing the supply.
Not everyone. Just first time buyers.
I’d basically a 25k incentive to join the housing game.
It may have a very mild effect on increasing housing prices, but historical that’s not something that has an impact.
Having dirt cheap rates, does do what you’re saying.
Both can be done. Besides, first time homebuyers are the ones most in need of the kickstart needed to ownership. Consider also that the people with $2m homes likely aren’t going to see a direct increase in demand because of this. It would instead be current owners of so-called starter homes who could then use their existing equity to purchase a forever home.
Are there starter homes just sitting about, unpurchased because people can’t afford them?
My friend, in california, every house costs a million dollars. All this is going to do is bump up the value of a house by 2.5% at the expense of taxpayers. Unless we’re going to massively increase tax on the rich and cut tax for the poor, I don’t see this as a win.